Rs 23 lakh crore boom! PMS and AIFs are driving India’s alternative investment transformation

India’s alternative investment ecosystem has entered a new phase of scale, with Portfolio Management Services (PMS) and Alternative Investment Funds (AIFs) collectively crossing Rs 23.43 lakh crore in assets by September 2025. New data compiled by PMS Bazaar shows that the sector has grown at a remarkable CAGR of 31.24% over the past decade, driven by rising institutional participation and a marked shift among affluent investors towards high-conviction, strategy-driven portfolios.According to the report, the PMS segment has undergone a seven-fold expansion over the past decade. PMS Assets Under Management, including discretionary and non-discretionary mandates but excluding co-investments and advisory assets, have increased from Rs 1.27 lakh crore in September 2015 to Rs 8.37 lakh crore in September 2025, registering a 10-year CAGR of 20.75%. The growth also coincides with the increase in the number of licensed managers, with 495 SEBI-registered portfolio managers now active.

The momentum among AIFs was even more dramatic. Total AIF commitments have increased from Rs 27,484 crore in September 2015 to Rs 15.05 lakh crore by September 2025, translating into a remarkable CAGR of 49.23%. Category II ABFs account for roughly three-quarters of total liabilities and have taken the lead, rising from Rs 14,707 crore to Rs 11,20,589 crore over the same period – a CAGR of 54.24%. India now hosts 1,699 registered AIFs across all categories as of November 17, 2025, underscoring the diversification of domestic alternatives.

Commenting on the structural shift, R. Pallavarajan, founder and director of PMS Bazaar, said that high-net-worth investors are increasingly looking for “diversification and reliable sources of alpha,” adding that PMS and AIF platforms offer “belief-based, strategy-driven portfolios built for today’s complex market environment.”

George Heber Joseph, CIO & CEO (Equity) at ASK Investment Managers, noted that the rising demand is not just from HNIs and UHNIs, but also from new-age investors, startup founders, senior professionals and clients from Tier II and Tier III cities. He said PMS and AIFs are “no longer a niche market” and are emerging as the next frontier of professional asset management.

The figures were released at the PMS Bazaar Summit in Mumbai, where the platform also unveiled AIF Bazaar, a dedicated initiative aimed at improving transparency and accessibility across the AIF landscape.Disclaimer: Recommendations, suggestions, views and opinions expressed by the experts are their own. These do not represent the views of The Economic Times)